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Second thoughts on development accounting

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  • E. Gundlach
  • D. Rudman
  • L. Wossmann

Abstract

The relative roles of factor inputs and productivity are estimated in explaining the level of economic development. For a large sample of countries, it is shown that international differences in factor inputs account for between two thirds and three quarters of international differences in output per worker if alternative identifying productivity assumptions and a quality-adjusted measure of human capital are employed. For a sample of OECD countries, it is found that all differences in output per worker can be attributed to differences in factor inputs, leaving no role for international productivity differences. This result supports the reasoning of a traditional neoclassical growth model.

Suggested Citation

  • E. Gundlach & D. Rudman & L. Wossmann, 2002. "Second thoughts on development accounting," Applied Economics, Taylor & Francis Journals, vol. 34(11), pages 1359-1369.
  • Handle: RePEc:taf:applec:v:34:y:2002:i:11:p:1359-1369 DOI: 10.1080/00036840110096327
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    References listed on IDEAS

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    1. Robert E. Hall & Charles I. Jones, 1999. "Why do Some Countries Produce So Much More Output Per Worker than Others?," The Quarterly Journal of Economics, Oxford University Press, vol. 114(1), pages 83-116.
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    Citations

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    Cited by:

    1. Erich Gundlach, 2003. "Growth Effects of EU Membership: The Case of East Germany," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 30(3), pages 237-270, September.
    2. Caselli, Francesco, 2014. "The Latin American efficiency gap," LSE Research Online Documents on Economics 86336, London School of Economics and Political Science, LSE Library.
    3. Eric A. Hanushek & Jens Ruhose & Ludger Woessmann, 2017. "Knowledge Capital and Aggregate Income Differences: Development Accounting for US States," American Economic Journal: Macroeconomics, American Economic Association, vol. 9(4), pages 184-224, October.
    4. Eric A. Hanushek & Jens Ruhose & Ludger Wößmann, 2015. "Human Capital Quality and Aggregate Income Differences: Development Accounting for U.S. States," CESifo Working Paper Series 5411, CESifo Group Munich.
    5. Kai Carstensen & Erich Gundlach & Susanne Hartmann, 2009. "The Augmented Solow Model with Mincerian Schooling and Externalities," German Economic Review, Verein für Socialpolitik, vol. 10, pages 448-463, November.
    6. Hanushek, Eric A. & Woessmann, Ludger, 2012. "Schooling, educational achievement, and the Latin American growth puzzle," Journal of Development Economics, Elsevier, vol. 99(2), pages 497-512.
    7. Eric A. Hanushek & Ludger Woessmann, 2008. "The Role of Cognitive Skills in Economic Development," Journal of Economic Literature, American Economic Association, vol. 46(3), pages 607-668, September.
    8. Audrey Siew Kim Lim & Kam Ki Tang, 2006. "Human inequality, human capital inequality and the Kuznets curve," CAMA Working Papers 2006-08, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
    9. Sturgill, Brad, 2014. "Back to the basics: Revisiting the development accounting methodology," Journal of Macroeconomics, Elsevier, vol. 42(C), pages 52-68.
    10. Francesco Caselli, 2014. "The Latin American Efficiency Gap," Discussion Papers 1421, Centre for Macroeconomics (CFM).
    11. K.K.Tang & Lim, A. S. K, "undated". "Education Inequality, Human Capital Inequality and the Kuznets Curve," MRG Discussion Paper Series 0506, School of Economics, University of Queensland, Australia.
    12. Marcelo Soto, 2006. "The Causal Effect of Education on Aggregate Income," Working Papers 0605, International Economics Institute, University of Valencia.
    13. Martin Paldam & Erich Gundlach, 2008. "Two Views on Institutions and Development: The Grand Transition vs the Primacy of Institutions," Kyklos, Wiley Blackwell, vol. 61(1), pages 65-100, February.
    14. Gundlach, Erich, 2003. "Die Bedeutung des Humankapitals für das Wirtschaftswachstum," Open Access Publications from Kiel Institute for the World Economy 3029, Kiel Institute for the World Economy (IfW).
    15. Francesco Caselli, 2014. "The Latin American Efficiency Gap," CEP Discussion Papers dp1289, Centre for Economic Performance, LSE.
    16. Gundlach, Erich & Wößmann, Ludger, . "Bildungsressourcen, Bildungsinstitutionen und Bildungsqualität: Makroökonomische Relevanz und mikroökonomische Evidenz," Chapters in Economics, University of Munich, Department of Economics.
    17. Vincenzo Scoppa, 2007. "Quality of Human and Physical Capital and Technological Gaps across Italian Regions," Regional Studies, Taylor & Francis Journals, vol. 41(5), pages 585-599.
    18. Siebert, Horst, 1999. "How can Europe solve its unemployment problem?," Kiel Discussion Papers 342, Kiel Institute for the World Economy (IfW).
    19. Gundlach, Erich, 1999. "Die Produktivität der Bildung," Open Access Publications from Kiel Institute for the World Economy 2320, Kiel Institute for the World Economy (IfW).
    20. Gundlach, Erich, 1999. "Investment in education: Some lessons from the international evidence for the Baltic states," Kiel Discussion Papers 333, Kiel Institute for the World Economy (IfW).
    21. Caselli, Francesco, 2014. "The Latin American efficiency gap," LSE Research Online Documents on Economics 60358, London School of Economics and Political Science, LSE Library.

    More about this item

    JEL classification:

    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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